We have only done well after Cyrus Mistry's exit, Tata Sons tells court

Tata Sons told the Supreme Court on Thursday that the NCLAT erred in recording that the Shapoorji Pallonji (SP) Group, of which Cyrus Investment and Sterling Investment are a part, had invested Rs 1,00,000 crore in Tata Sons when they had actually put in a mere Rs 69 crore.“Admittedly, Cyrus Investment and Sterling Investment have acquired majority of their shareholdings through bonus issue and rights issues. While Cyrus and Sterling invested merely Rs 69 crore, they have received dividend of around Rs 872 crore from Tata Sons from 1991 to 2016,” the Tata Sons said in its petition challenging NCLAT’s decision to reinstate Cyrus Mistry as executive chairman of Tata Sons. Mistry was removed on October 24, 2016.It said SP Group first became shareholders of Tata Sons in 1965 by acquiring 40 ordinary shares and 48 preference shares of its paid-up share capital. “Thereafter over the years, Cyrus Investment and Sterling Investment acquired Tata Sons’ shares (largely through bonus and rights issue of shares), which have allowed them to reap great economic reward,” the petition said. 73078985 The Tata petition said, “This is evident from the fact that their original investment of Rs 69 crore (a large chunk of which was made at the time of the rights issue in 1995), appreciated to around Rs 58,441 crore in March 2016.”Explaining the shareholding pattern of SP Group, including Pallonji Shapoorji Mistry and his son Cyrus Mistry, it said they hold 18.4% of the paid-up ordinary share capital in Tata Sons, which represents 2.91% of the issued share capital of Tata Sons (including ordinary and preference share capital). In August 2006, Cyrus Mistry was appointed as nonexecutive director independently and not as a nominee of SP Group.Ratan Tata’s decision to step down as executive director of Tata Sons in 2012 after a 21-year stint saw Cyrus Mistry’s appointment as executive deputy chairman for five years from April 1, 2012 till March 31, 2017. On December 29, 2012, Mistry was designated as executive chairman. He was also appointed as director and non-executive chairman on boards of Tata Consultancy Services Ltd, Tata Industries, Tata Teleservices, Tata Steel, Tata Motors, Tata Power, Tata Global Beverages, Indian Hotels Company and Tata Chemicals.Tata Sons in its petition said, “Instead of living up to the expectations of the Selection Committee and taking the Tata Group to newer heights, the performance of Tata Sons and most of the other operating companies was unsatisfactory during chairmanship of Mistry. Mistry’s leadership was also marred by his reluctance to disassociate himself from his family business.”The last straw on the camel’s back was Mistry’s decision for Tata Power to acquire renewable energy assets of Welspun Renewables Energy at about Rs 9,000 crore by keeping the Tata Sons board in the dark about the transaction, the petitioner alleged. “By October 24, 2016, Tata Sons had completely lost their confidence in the ability of Mistry to lead the Tata Group” and agreed for a motion to replace Mistry.The petition said, after N Chandrasekaran took over as executive chairman of Tata Sons on February 21, 2017, “Tata Sons is on an accelerated path of growth and witnessing improvement in several financial parameters”.

from Economic Times https://ift.tt/2sGLKVj